The Kelo Decision and Condemnation for Economic Development

In a 2005 decision, Kelo v. City of New London, 545 U.S. 469 (2005), the U.S. Supreme Court upheld a Connecticut city's use of eminent domain authority to condemn private homes as part of a plan to redevelop a neighborhood for residential, commercial, and park purposes. The Court concluded that the general benefits a community enjoyed from economic growth qualified such redevelopment plans as a permissible "public use" under the Takings Clause of the Fifth Amendment.

The Kelo decision generated much public criticism for what many considered an expansive view of eminent domain authority and a violation of private property rights. However, the Court emphasized:

nothing in our opinion precludes any State from placing further restrictions on its exercise of the takings power. Indeed, many States already impose "public use" requirements that are stricter than the federal baseline. Some of these requirements have been established as a matter of state constitutional law, while others are expressed in state eminent domain statutes that carefully limit the grounds upon which takings may be exercised.

The post-Kelo debate in this state focuses on whether eminent domain authority under the state constitution precludes condemnation for economic development purposes. A number of commentators have emphasized that our state supreme court has consistently has denied local governments the authority to condemn private property for purely economic development purposes, and, consequently, that the Kelo decision will have little or no effect on condemnations in this state. See, for example:

Frequently cited in support of this position is In re Seattle, 96 Wn.2d 616, 633-34 (1981), where the state supreme court held that "no statutory authority to establish or to condemn property for an urban 'focal point', or an urban shopping center, or facilities to be leased for private use as retail establishments, restaurants, or theaters."

The Washington State Constitution contains a provision that, on its face, appears to provide strong protection against the use of eminent domain for economic development. Indeed, some commentators have argued that the citizens of Washington have nothing to fear from the Kelo decision, because Washington State's Constitution would protect them against similar abuses. However, the Task Force has reviewed the mixed results of Washington courts' interpretation of the Washington State Constitution's eminent domain limitation, and has reviewed legislation that specifically allows local governments to exercise the power of eminent domain for economic development purposes.

The Task Force believes that the existing law in Washington does not adequately protect individuals from the use of eminent domain for economic development purposes. Indeed, the Task Force concludes that existing statutes specifically provide for such economic development condemnations, and provide such a broad definition of "blight" so that a local government may exercise eminent domain for economic development under the pretext of removing "blight". It also provides a legislative scheme that can both confuse and tempt local governments into a belief that exercising the power of eminent domain for economic development comports with the Washington State Constitution.

(Footnote omitted.) Other commentators have cited the state's Community Renewal Law, chapter 35.81 RCW, as providing authority to condemn property for economic development. For example:

Following the Kelo decision and in response to public concern, the state legislature has in each year introduced bills to reaffirm that the state constitution does not authorize condemnation for economic development purposes or to otherwise address concerns about the impact of Kelo. To date, and for whatever reasons, no such legislation has been enacted.